Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1887-05-21
CETY'S BoNDHoLDERS.
THEY FAIL TO GET THE SURPLUS
OF SPECIAL FUNDS.
Judge Armstrong Decides that the
School and Other Special Funds
Cannot BE Touched by Them.


In the Superior Court of the County Of
Sacramento, State of alifornia-Daniel
Meyer, plaintiff, VS.. James n. Porter, de-
PENDANT.
The plaintiff owns interest coupons"
owing by the city of Sacramento and past
due, amounting to $4,000, which are pay
able out of the interest and sinking fund of
the city, and in this proceeding he seeks
a peremptory writ ot mandate to compel
the defendant, as the Treasurer Of the city,
to transfer into the interest and sinking
fund sums of money alleged TO have re-
manned at the close of the fiscal year end
ing on the day preceding the first Monday
in April, 1885, in the general fund, the
Water-works fund, the Fire Department
fund, the school fund, and the special
street fund of the city of Sacramento. At
the argument the counsel for the plaintiff
abandoned all claim to any surplus in the
special street fund, and, therefore, it is I'M
necessary to consider it.
SCHOOL FUNDS.
There never was any fund belong
ing to the city, or city and county
of Sacramento, known as the school
fund, but there was, and is, fund called
the "city school fund" There was in
that fund at the close of the fiscal year
ending on the day preceding the first Mon
day in April, 1885, the sum of 500, 1876 So.
We will first consider the claim of the
plaintiff to this surplus. He POUNDS his
claim to it upon Sections So, sc. and 65 of
the Act of the Legislature incorporating
the city and county of Sacramento, APP
proved April "A, 1858, Statutes 1858, p
267). Under this Act the bonds were
issued to which the interest coupons
owned by the plaintiff were attached. 1t
is contended for the plaintiff that those
sections Of the Act entered into and
formed q part of those contracts. 1t is a
familiar principle that the law existing at
the time contract is made enters into
and forms part of it, and the full scope
and extent of the obligation of such con-
tract are determined by the law as it then
existed. Robinson VS.. Magee, 8 Cal, 81 4;
Cooley's Const. Linn. 4th Ed, 34S.) But
it does not follow that because the law en-
tiers into and forms part of every con-
tract, that every Act of the Legislature
does. The Act must be valid law to
have such effect. If the language of those
sections is broad enough to secure to the
plaintiff the right to have the surplus
school fund applied to the satisfaction of
his Interest coupons" to that extent,
they contrayene the Constitution, as we
shall see, and are void But the import of
the language of those sections of the Act
construed together does not confer upon
the bondholders any right to any part of
the city school fund" This appears
from consideration of the phraseology of
those sections. Section So reads: "The
revenue derived from and within the CITY
limits, for municipal purposes, viz: Taxes,
licenses, harbor dues, water rents and
fines collected in the Mayors Court,
or otherwise, when paid into the
Treasury shall I've set apart and appor-
toned as follows: Fifty-fve per cent.
to an interest and sinking fund,
which shall be applied to the payment
of the annual interest and the final re-
demption of bonds Issued for city indebt-
edness in accordance with the provisions of
this Act; fifteen per cent. to a salary
fund, which shall be applied to the pay
ment of the salaries of the municipal Of
ticers as provided in this Act; eight per
cent. to school fund, which shall be ap-
piled to the support of schools within the
city limits; and the balance, twenty-five
per cent, to fund to be used for all such
necessary municipal purposes as are not
otherwise provided for in this section, and
shall be called the contingent fund"
This section does not create or define
the city school fund.-" but only provides
that eight per cent of specified revenue
shall be set apart and appropriated "to a
school fund" The Getty school fund" was
created nddefned by Section 65 of the
Act. 1t reads: 1.-The Treasurer shall
keep city scool fund, separate and dis
tinct from all other funds, into which fund
shall be paid all money appropriated to
city schools under the provisions of Section
30 OF this Act, all moneys received from
the State on account of the city schools
share of any superintendent of State school
funds, and the city's proportion of all
county moneys collected and set apart for
school purposes"
Then by virtue of this section, when
the revenue derived from the three dis
tinct sources mentioned therein is mixed
or commingled together in the treasury.
and kept by the Treasurer separate and
distinct from all other funds for school
purposes, it constitutes the city school
fund" and 1t is not within the letter or
meaning of Section So of the Act. and
therefore not reached for the benefit of
the plaintiff by it. The portion of that
section claimed by the plaintiff to take
hold of the surplus in the city school fund
at the close of the fiscal year for him, is
this " If at the close of any fiscal year
there shall remain surplus in either of
the funds mentioned in Section 50, such
surplus moneys shall be transferred to the
interest and sinking fund, provided for in
such thirty-fifth section" This section
must be so construed, according to we'll
settled rule for the construction of statutes.
as not to conflict with the provisions of
the Constitution Of the State, if possible :
and if we construe it as only assuming to
command the transfer to the Interest and
sinking fund.-" the surplus which might
remain in the fund mentioned in Section
80 other than the money therein set apart
for school purposes, which entered into
and became 4 constituent part of the
city school fund.-" as created and de-
fined by Section 80 of the Act, then, Sec
ton SO may stand in harmony with the
Constitution; but otherwise, it cannot.
and must yield to the superior force of the
Constitution. The second section of Ar
tiele TX. of the Constitution of the State,
under which the State was admitted into
the Union, and which was in force at the
time the Act of 1858 incorporating the
city and county of Sacramento was passed,
declared that :" the proceeds of all land
granted by the United States to this State
which may be sold or disposed of, and the
i've hundred Thousand acres of land
granted to the new States under an Act Of
Congress distributing the proceeds of the
public lands among the several States
of the Union, approved, A D., 1S4l,
and all estates of deceased persons who
may have died without leaving will or
heir, and also such per cent. as may be
granted by Congress on the sale of lands
in this State, shall be and remain per-
petual fund, the interest of which, together
with all the rents of the unsold lands and
such other means as the Legislature NAV
provide, shall be inriolably appropriated
to the support of common schools
throughout the State" And such is
the new Constitution, Article IN,
Section 4. No one will contend that
the lands, or the proceeds of the lands